John Lewis staff miss out on bonus despite profits jump; Britain’s housing market loses steam – business live
Key events
Global oil supply to outstrip demand amid tariffs, IEA says
Global oil supply could outstrip demand by around 600,000 barrels per day this year, according to the International Energy Agency, which lowered its prediction for 2025 demand growth.
The global oil surplus could increase by a further 400,000 barrels a day (bpd) if OPEC+ (the OPEC oil cartel and allies including Russia) continues to unwind output cuts, and fails to rein in overproduction against quotas, the Paris-based agency said in its monthly oil market report.
The IEA revised down its 2025 oil demand growth forecast by 70,000 bpd to around 1m barrels, with growth driven largely by Asia, in particular China’s petrochemical industry.
It said demand in the last quarter of 2024 and the first quarter of this year was lower than expected amid “an unusually uncertain macroeconomic climate”. The agency said:
New US tariffs, combined with escalating retaliatory measures, tilted macro risks to the downside. Recent oil demand data have underwhelmed, and growth estimates for the fourth quarter of 2024 and the first quarter of 2025 have been marginally downgraded.
Oil prices are little changed at the moment, with the global benchmarks, Brent crude and US crude trading at $70.90 a barrel and $67.58 a barrel respectively.
Keir Starmer could face the biggest rebellion of his premiership with dozens of Labour MPs angry at his plans to cut billions from the rising welfare bill and threatening to vote against freezing disability benefits, reports our political editor Pippa Crerar.
In a bid to avoid a damaging showdown with MPs and peers, Downing Street began inviting groups of Labour backbenchers to meetings on Wednesday, stressing the “moral case” for changes designed to get people back to work as they made the case for painful changes.
The Guardian understands that dozens of MPs have urged the government to think again. Many are particularly concerned that Rachel Reeves is set to go further than the former Tory chancellor George Osborne who, despite cutting working-age benefits for four years, kept the personal independence payments (Pip) rising.
Why is Keir Starmer’s government seeking to cut the benefits bill?
Labour is targeting sickness and disability benefits that have ballooned amid an increasingly ageing and unwell population. Our economics correspondent Richard Partington takes a look.
The UK has tumbled down the league of affluent nations after almost a decade of welfare cuts and stagnant incomes, according to a report that found the poorest districts in Britain now rank below the lowest-income areas of Malta and Slovenia.
In a warning for ministers to protect welfare spending before Rachel Reeves’s spring statement in two weeks’ time, the National Institute of Economic and Social Research (NIESR) said the UK’s reputation for high living standards was under threat.
Districts in Birmingham were ranked as the poorest in the UK, according to the study, and below the poorest areas of Finland, France, Malta and Slovenia, it found.
Between 2020 and 2023, a combination of welfare cuts and near-zero real income growth meant the bottom 10% of earners in the West Midlands saw their living standards fall below the level in parts of Slovenia, researchers said.
“UK regional income growth has been among the slowest in Europe, whilst real incomes in the majority of European regions have grown at a faster rate than those in UK,” the report said.
Reeves is expected to use her spring statement on 26 March to outline further cuts to welfare benefits to meet spending rules laid out in the budget last autumn.
Donald Trump has accused Ireland of stealing the US pharmaceutical industry and the tax revenue that should have been paid to the US treasury, in a blow to the Irish premier, Micheál Martin, who had hoped to emerge unscathed from a visit to the White House marking St Patrick’s Day.
The US president showed grudging respect for Martin, alternately ribbing and complimenting him, while also launching several broadsides against the EU.
He repeatedly took aim at Ireland’s historical low-tax policies, which helped lure US multinationals including Pfizer, Boston Scientific and Eli Lilly to its shores.
Big pharma now drives Ireland’s €72bn (£60bn) worth of annual exports to the US, with taxes paid in Ireland on drugs consumed in the US.
“The Irish are smart, yes, smart people,” Trump said. “You took our pharmaceutical companies and other companies … This beautiful island of 5 million people has got the entire US pharmaceutical industry in its grasps.”
Here’s our full story on John Lewis:
In other news, two British taxi companies have launched a crowdfunding drive for the last leg of a lengthy legal battle with Uber that could result in higher cab fares.
Uber will seek, at a supreme court hearing in July, a ruling on contractual models that affect whether VAT applies to private-hire companies outside London, which it has argued would level the playing field across the UK.
However, the minicab industry has fought the move, which it said could raise the cost of taxi journeys outside London by at least 20%.
The private hire firms Delta Taxis from Liverpool and Veezu from Cardiff are attempting to raise £500,000 to sustain their legal battle. Costs already exceed £1m after high court cases in 2022 and 2023, and a court of appeal case in 2024.
Deutsche Bank pays highest bonuses in a decade
Deutsche Bank has ramped up its bonus pool to the largest in a decade, after a surge in deals and trading last year.
Germany’s biggest lender paid staff €2.5bn (£2.1bn) in variable compensation last year, it said in its annual report – up 26% on a year earlier.
The bank said it had a new remuneration system which means more staff can receive bonuses.
There were 647 high earners who were paid more than €1m each, up from 505 in 2023, on the back of a strong performance in the investment bank. Four bankers earned more than €10m each, one of them as much as €18m. Bonuses for investment bankers were up by 32%.
Chief executive Christian Sewing received a total package of €9.8m last year, up from €8.7m the year before. A change in the remuneration system means that the long-term part of his 2024 bonus is on a pro forma basis and the final amount will only be decided after 2026.
This came after Deutsche Bank reported strong fixed-income securities and currencies trading, while revenues fell in the corporate and private bank. Its expects higher investment banking revenues this year.
Full-year pre-tax profits rose by 2% to €5.7bn but profits tumbled by 10% in the fourth quarter, largely due to restructuring costs and a write-down on its recent takeover of the UK stockbroker Numis.
Like other banks, Deutsche Bank is cutting jobs, a total of 3,500, as part of post-pandemic cost reductions, by automating work where possible in a major hit to back-office staff.
Bundesbank chief warns US tariffs could tip Germany into recession
Donald Trump’s trade policies could tip Germany, Europe’s largest economy, into another recession, the president of the country’s central bank warns.
The Germany economy has shrunk in the past two years and with US tariffs, the country “could expect a recession for this year” too, Joachim Nagel, the head of the Deutsche Bundesbank, told the BBC World Service.
Without the impact of tariffs, the bank forecasts the German economy will grow moderately, by about 0.2%, he said.
Nagel said “there are only losers” when it comes to tariffs, and backed the EU’s countermeasures against Trump’s 25% levy on all steel and aluminium imports from overseas imposed yesterday.
Tariffs are a key part of the US president’s economic vision as he hopes they will boost US manufacturing and protect jobs, but economists say they will push up prices for US consumers.
Nagel called Trump’s tariff policy “economics from the past” and “definitely not a good idea”.
The EU announced countertariffs on a range of goods from 1 April. Nagel expressed hope that when the US realises that the price that needs to be paid will be “highest on the side of the Americans”, it will give an opportunity for both sides to come to a different resolution.
“I hope that in the end, good policy will succeed,” he said.
Germany is hugely reliant on exports, and its cars such as BMW, Mercedes, Volkswagen and Audi are popular in the US.
Nagel rejected claims that Germany was the “sick man of Europe”, saying it had a “strong economic basis” and “strong small and medium sized companies”.
But nevertheless, when you are exposed to an export-oriented model, then you are more exposed in a situation when tariffs are going up and there are so many uncertainties, so many unknowns.
The head of Germany’s BGA federation of wholesale, foreign trade and service, Dirk Jandura, warned yesterday that Germans might have to pay more for American products, such as orange juice, bourbon and peanut butter, in supermarkets.
Later today, the German parliament will debate proposals to loosen its controversial debt brake to allow higher defence spending and to set up a €500bn infrastructure fund, which would be a major fiscal shift.
Nagel said it was an “extraordinary measure” for an “extraordinary time”.
The whole world is facing tectonic changes which makes the current situation very different from those seen in the past, hence the fiscal change.
He said the policy change would give Germany some financial breathing room for recovery in the next few years, adding it provided a “stability signal to the market”.
Introduction: John Lewis staff miss out on bonus despite profits jump; Britain’s housing market loses steam
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Despite tripling full-year profits, the John Lewis Partnership has decided not to pay a staff bonus for the third year in a row.
The owner of John Lewis and Waitrose, which is in the middle of a turnaround plan, reported a profit of £126m, with sales up 3% to £12.8bn in the year to 25 January. It has closed 16 department stores and at least 20 Waitrose outlets and cut thousands of jobs at head office.
The retailer said it is prioritising investment over the bonus with plans to spend £600m on transforming the business.
Jason Tarry, chairman of the John Lewis Partnership, said:
These are solid results, which show that our customers are responding well to our investments in quality products, value and service. We have made good progress with much more still to do.
The retailer, which employed about 69,000 people last year, has now skipped the bonus to workers in four out of the last five years, after diving to a loss during the Covid pandemic when it was forced to close stores during lockdowns.
Britain’s housing market had its slowest month in more than a year in February as a rush of buyers to complete before a tax break deadline ran out of steam.
The monthly survey from the Royal Institution of Chartered Surveyors showed buyer demand was weakest since November 2023, with a further slowdown expected in the months ahead.
The volume of newly-agreed sales fell in February, with London-based professionals reporting a particularly noticeable dip in sales agreed during the month.
Higher stamp duty costs for some home-buyers from 1 April are expected to dampen market activity. Stamp duty applies in England and Northern Ireland.
The net balance of house prices, which measures the difference between surveyors reporting a rise and a fall, dropped to +11, down from January’s +21 and a two-year high of +25 in December, and the lowest since September. However, a net balance of 47% expect property values to increase in the next 12 months.
The housing market had picked up in previous months, boosted by lower mortgage rates and expectations of Bank of England interest rate cuts.
RICS chief economist Simon Rubinson said:
The UK housing market appears to be losing some momentum as the expiry of the temporary increase in stamp duty thresholds approaches.
Some concerns are also being expressed by respondents about the re-emergence of inflationary pressures and the more uncertain geopolitical environment. That said, looking beyond the next few months, sales activity is seen as likely to resume an upward trend with prices also moving higher.
Turning to the rental market, he said:
Meanwhile, despite a flatter trend in demand for private rental properties, the key RICS metric capturing rental expectations is still pointing to further increases, demonstrating that the challenge around supply spans all tenures.
Sarah Coles, head of personal finance at Hargreaves Lansdown, explained:
The window of opportunity has effectively slammed shut on buyers, because even in February they knew there was next-to-no chance of getting a sale sorted before the end of the stamp duty holiday.
Unsurprisingly, it has sucked some of the life out of the market. House prices have continued to rise, but not as quickly, and agents are fairly convinced we’ll be in this lull for a while yet.
Asian stock markets are in the red, as optimism over cooling US inflation gave way to worries about the economic impact of Donald Trump’s trade tariffs. Japan’s Nikkei gave up earlier gains to dip slightly while Hong Kong’s Hang Seng was down by 0.7% and the Shenzhen exchange in China lost nearly 1%.
Stock futures are suggesting a lower open in Europe and on Wall Street later.
Gold rose by 0.5% as high as $2,947.06, approaching a record high hit on 24 February of $2,956.15.
The Agenda
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10am GMT: Eurozone industrial production for January
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12.30pm GMT: US Producer prices for February; initial jobless claims for week of 8 March
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11am GMT: German parliament to debate borrowing bonanza
